EU Farm Subsidies Drive Up Healthy Food Prices, UN Report Finds

European Union farm subsidies have helped drive up prices of fruit and vegetables, making it harder for people to afford a healthy diet, a United Nations food report finds.

From 2021 to 2025, the price of a healthy diet has risen 36 percent in Europe, according to the Food and Agriculture Organization’s annual State of Food Security and Nutrition report, published Tuesday

While inflation — caused by the Covid-19 pandemic, the Ukraine war and likely the crisis in the Middle East soon — has driven up food prices across the board, politicians are also to blame for mainly subsidizing starchy crops like grains and the meat sector, making it disproportionately expensive to grow vegetables, fruits and legumes, according the FAO.

This amounts to “indirect taxation,” said David Laborde, one of the authors behind the report and the FAO’s lead director of agrifood economics.

The EU’s direct farm subsidies from the Common Agricultural Policy, which Europe has paid since the 1960s, is partly to blame. Europe's agricultural subsidies (CAP) form one of the largest EU funding programs.

But, the lack of investment into research to bring down the costs of producing fruit and vegetables, which tend to be labor-intensive, has had an even bigger effect on the affordability of healthy foods in Europe, Laborde said.

“This has increased productivity in some sectors. But we have done nothing for pulses and beans,” Laborde told POLITICO.

For the average European citizen, that means that the cost of buying a meal every day that meets the minimum requirements for a healthy diet — the right balance of nutrients, calories and variation — rose by $1 between 2021 and 2025, to $3.97. The European price surge is higher than the world average of a 25 percent increase, the FAO report found.

For every healthy meal, vegetables, fruit and legumes eat up nearly 60 percent of the total price, while starchy crops like wheat or rice take up just 13 percent. Still, most farm subsidies worldwide end up in grain, sugar, dairy, beef and oil crops for animal feed.

One study in Nature estimated that 80 percent of the EU’s support for farmers goes directly to animals or feed. The EU’s hectare-based subsidies have made it unattractive for farmers to grow vegetables for people, compared to other crops, Laborde said.

In addition to from reallocating subsidies to fruit and vegetable farming, the FAO recommends that places like Europe should invest more in innovation to lower the manual labor costs for growing veggies.

Other recommendations focus on the supply chain such as reducing food waste, supporting inputs like fertilizers and increasing price transparency.

Which crops to back?

The European Commission recently published its “protein action plan,” which mainly focuses on reducing Europe’s dependency on feed from abroad, but also aims to boost legume production for people.

But any substantial funding depends on the next big fight taking place in the EU the rest of this year and most likely beyond: The next Common Agricultural Policy for 2028 to 2034.

As Europe’s lawmakers prepare for a fall of intense discussions, they need to stop reverting to their traditional proposals and instead look at more innovative solutions, Laborde recommends.

“You have a big legacy effect,” he said. For farmers growing grains and feed, secure supply lines and buyers are already there.

“Europe has designed its farm subsidies for historical reasons that were very different [from] delivering a large amount of fruit and vegetables for its population,” said Laborde.

The European Commission declined to comment on the FAO report. But in a written comment, a Commission spokesperson underlined that the EU leadership has no intention of deciding what people should eat.

As for the protein action plan, it includes “demand-side actions to help consumers make informed choices, including origin labelling, the use of sustainability criteria in public procurement, and awareness-raising campaigns, for example on the benefits of pulses,” the spokesperson said.